Licensing minister Kim Howells has agreed that all pubs in England and Wales should be operating under the new licensing regime expected to be unveiled in this month's Queen's Speech from July 2004.

Howells has also told licensed trade organisations that licensees will not need to reapply to keep their existing licence conditions, after fears of another "teacher vetting" fiasco, with licensing officials overwhelmed by applications and pubs forced to shut until the backlog was dealt with.

After the new Licensing Act receives royal assent, which is expected to happen in July 2003, licensees will have until January 2004 to register their existing licences and lodge applications for variations, Howells has said.

Licensing officials will then have a maximum of six months to process applications before a date is set in July 2004 for the new system to begin.

Mark Hastings, spokesman for the British Beer and Pub Association, one of the organisations involved in the talks with Howells, said it was "a clear sign that talking to the government and working with them resulted in benefits to the whole of the sector."

Hastings said: "We have retained grandfather rights for all pubs to keep what they already have and we have also managed to set a very tight timetable for local authorities to agree the new hours."

John McNamara, chief executive of the British Institute of Innkeeping, said he remained concerned that there was not a long enough lead-in time to process the numbers of applications involved. He said: "You would have to go from a standing start to fully operational in only a few months."

The Local Government Association said processing the expected 150,000 applications should be "quite quick" because most would not be opposed and "there will only be a minority that will come across problems."